EVERYTHING IS GOING SWIMMINGLY: A spiraling Israel-Hamas war could plunge the global economy into recession and depress the stock market by 20%, warns EY economist.

“If your market is 90% U.S.-based, in the Midwest, why should you care about the [conflict]? Well, you will have to care because it will have consequences that will affect your business,” Daco said. “Depending on how diffuse the situation becomes, the consequences could go from very marginal to significant.”

The hypothetical situation outlined above, which Daco dubbed the “uncontained” scenario, includes a widening of the front to Lebanon and Syria, direct involvement of the U.S. and Iran, and wider social unrest in the Middle East. That outcome isn’t more likely than a more contained scenario, which would limit the war to a ground offensive in Gaza and have almost no long-term global economic consequences. Still, CEOs better take all possibilities into account as they plan ahead.

The prospect of long-term economic consequences also points to a definitive end to the days in which multinational companies could simply forecast economic growth, trade, and manufacturing costs for their global markets. They must also factor in the constant threat of disruptive forces like political and social turmoil and war.

But Paul Krugman had assured me this kind of thing was great for the economy.